June 15, 20i7

The Ohio House of Representatives Public Committee
77 8. High St

13th Floor

Columbus, OH 43215

I
l-lon. William Seitz i
I

BE: Harmonizing State Public Policy Objectives with Wholesale Electricity'Markets
Dear Chairman Seitz,

Thank you for the productive June 71h conversation discussing HB 239. That bill, cosponsored by
Representatives Carfagna and Smith, is under consideration in the Ohio House Public Utilities Committee.

PJM appreciates you explaining the factors motivating the legislature?s efforts around HB 239. It is ciear that
the Ohio policy motivating this bill is materially different than the policy underpinning other electricity bills
pending before the legislature. We better understand the uniqueness of the OVEC unit ownership and power
purchase agreements with utilities in Ohio and other neighboring states, PJM does not intend to oppose the
proposed legislation but we believe our markets may need to accommodate this policy.

Some bill supporters have stated their explicit belief that, despite merchant affiliates owning a significant share
of the units, no impacts to the wholesale market could occur as the result of HB 239. However, PJM believes
that just as is the case with any supplemental payment to resources that would otherwise be uneconomic,
there is potential for market impacts. The bill therefore underscores the importance of our on-going initiatives
to accommodate public policy inside the wholesale market design.

As discussed during our conversation, PJM has proposed a mechanism the Capacity Market Repricing
Proposal to assure that the investment signal sent by the capacity market continues to ensure reliability for
the region. The proposal intends to ensure competitive market prices and the resulting investment signal?s
ability to assure long term resource adequacy. Likewise, the proposal intends to absorb the statepolicy into
the market without frustrating the policy goals.

In the coming days PM will reach out to the Ohio Public Utilities Commission and the Ohio Governor?s Office
to share our thinking about how the PJM markets could accommodate state public policies. We look forward
to continuing to work with the General Assembly as you consider the evolution of energy policy in the State of
Ohio.

Sincerely,



554.. 
?t
Kerry Stroup 

cc: Representative Rick Certagna; Representative Ryan Smith